A court-appointed examiner’s report, ironically published on the Ides of March, discovered evidence of asset-stripping in Caesars bankruptcy reorganization.
Caesars could face huge amounts of bucks in potential damages in terms of its bankruptcy restructuring, based on the guidelines of a court-ordered examiners’ report, posted Tuesday.
The business is searching for chapter 11 bankruptcy because of its chief operating unit, CEOC, in an attempt to reorganize $18 billion of its debt, but is facing opposition from its junior creditors.
Ex-Watergate prosecutor Richard Davis led a team of attorneys which spent a year investigating the casino giant’s corporate dealings.
Their aim: to determine whether, as alleged, the company fraudulently transferred many of CEOC’s prime assets to Caesars Entertainment and other subsidiaries for the advantage of its controlling equity that is private, while placing them out of the reach of this junior creditors.
This form of asset-stripping left CEOC with absolutely nothing but distressed assets and a failure to pay its debts, argues a team of creditors led by the Appaloosa Management hedge fund, which is suing Caesars.
CEOC Possibly Insolvent as Early as 2008
The investigation team poured over 80 million pages of papers to produce its 80-page report. But finally it all boiled right down to one word.
‘ The simple answer to this real question is ‘yes’,’ c (suite…)